Manchester City today reported record losses of £121.3M.
Gary Cook – Manchester City CEO – overspending up the kazoo
City’s revenues are said to have increased by over 40% to £125M, which is fairly good, but this has been completely outweighed by the total wage costs which have reached a staggering £133.3M.
That is a £50M rise on a year ago, and to think that a company is paying out more in wages than it brings in in revenues, is completely outrageous to any educated financial person.
The Eastlands club are of course being bankrolled by Abu Dhabi-based owner Sheikh Mansour – and it’s a good job too, and that’s the only reason they can do what they have been doing with their financial books, since he took over a couple of years ago – and it should not be allowed.
Yes, Chelsea did the same thing many years ago and that shouldn’t have been allowed either, and the sooner the fair play rules from UEFA are introduced to stop this madness – the better it will be – and more clubs will be saved from bankruptcy.
Let’s be honest, this financial report would not be tolerated in any sane business, where the purpose of creating a business is to make a profit – any profit.
Manchester City chief executive Garry Cook said the losses “should come as no surprise” but that the club would now scale back on new signings. Well that’s a relief we suppose – and presumably Garry means the club are going to stop spending money they just don’t have.
This is what Cook said today:
“It is safe to say that player acquisitions on the scale we have seen in recent transfer windows will no longer be required in the years ahead now that we have such a deep and competitive squad.”
“In 2009-10, we narrowly fell short of our goals on the pitch, but still achieved nine club records including our best-ever result in the Premier League.”
The annual report shows the club’s net spending (not total spending mind you), on transfers has totaled £403M since 2008, and they’re still only in 4th position in the league – oh well – money can’t buy me love and I suppose it cannot buy a top football team either.
And to think Newcastle have bought 9 players for just £9M this year – and let’s see how our lads do against these players on Sunday – that should be one huge incentive for the Newcastle players this weekend.
Some good news for City is their revenues have risen to £125M, and that is due to a large increase in commercial income, from £87m to £125m.
That’s something owner Mike Ashley is also trying to do at Newcastle, where the Magpies’ revenues in the Championship last year went from £86M the season before, to around £38M, but should be back nearer £100M this season – hopefully.
The Manchester club is also looking at possibly expanding their Eastlands stadium, but tickets are still available for the game against Newcastle United on Sunday afternoon, so they should first ensure they have the demand, before they invest even more money in the club.
Happily, this insane spending by Premier League clubs will not be allowed to continue much longer, as the UEFA’s new financial fair play rules will come into effect shortly, and then essentially a club can only spend what it takes in.
Well what a concept that is – especially for PL clubs.
The English PL clubs have shown complete stupidity in their financial dealings for many years, to be sure, and if the financial people running some of these clubs were in real businesses, not fake ones where billionaires are involved on the outside, they would have been fired many moons ago.
The sooner the Premier League clubs are forced to run their clubs like proper businesses, the better it ill be for all concerned, and the new fair rules to be introduced by UEFA are many years overdue.